Whirlpool found guilty of profiteering by National Anti Profiteering Authority on its refrigerators to the tune of Rs. 4,07,451/-

Kerala State Screening Committee on Anti-Profiteering vs. Whirlpool of India Ltd.
(NAA) 

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The brief facts of case are that applicant had referred a case to the Standing Committee on Anti-profiteering against Whirlpool alleging profiteering on the supply of Refrigerator Whirlpool (HSN code 84182100) by not passing on the benefit of reduction in the rate of tax w.e f.  July 1, 2017, by way of commensurate reduction in price, in terms of Section 171 of the Central Goods and Services Tax (CGST) Act, 2017.

Few arguments by respondent and reply by authority

The respondent has argued thay the price increase could not be made due to other commercial factors had the effect of placing unlawful restriant on his fundamental right and was therefore ciolative of Article 19(1)(g) of the Constitution of India.

In this connection it would be relevant to state that section 171(1) only requires the respondent to pass on the benefit of tax reduction to the buyers and does not require him to fix his prices as per the direction of any authority. The above benefit has been granted to the ordinary buyers by the government by sacrificing their precious tax revenue which the respondent cannot be allowed to misappropriate and enrich himself at the expense of the common buyers who are unorganised, voiceless and vulnerable. The respondent is free to exercice his right to trade and fix the prices but he cannot deny the above benefit under the pretext that it infringes his right to trade.

Respondent has also contended that the cost of manufacture (BOM) of the product had witnessed an increase since August 2016 due to increase in raw material cost which was computer every month to arrive at the MAP at the end of each month.

In this connection, it would be relevant to mention that there was no ground for the respondent to increase his basic price on the very date from which the rate of tax was reduced. There is also no justification to establish why the respondent had not increased his price during the period from Aug 2016 to June 2017 every month when he was computing the MAP every month. 

The respondent has also contended that the average freight cost in the year 2017 had witnessed an increase as compared to the year 2016 of Rs. 29 per unit, which was required to be added in the price.

As discussed above, respondent had no reason to increase his price on the eve of the tax reduction and hence the above contention of the respondent is frivolous and not bonafide which was made with the ulterior motive of appopriating the benefit of tax reduction.

Held by Authority 

On the basis of facts of case, the amount profiteered by Whirlpool is determined as Rs. 4,07,451/-. Respondent is directed to reduce the price of above procduct and also deposit the profiteered amount along with interest @ 18%. A show cause notice be issued to him to explain why the penalty under GST Act should not be imposed on him.  

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